IFRS And GAAP Accounting Quiz: Test

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Questions: 86 | Attempts: 809 | Updated: Mar 21, 2023

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IFRS And GAAP Accounting Quiz: Test - Quiz

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Mar 21, 2023

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May 27, 2012

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IFRS And GAAP Accounting Quiz: Test

IFRS and US GAAP generally agree with their overall framework and purpose, but which body requires users to consider the framework in the absence of a specific standard?

Which body distinguishes between objectives for the business and non-business entities?

What are the two main financial reporting standard-setting bodies?

Which framework gives more emphasis on the importance of accrual and going concern assumptions?

A company reporting under standards other than US GAAP that trade in US markets MUST reconcile their statements with US GAAP.

Which body allows extraordinary items?

Extraordinary items are not expected to continue in future periods.

Under US GAAP, dividends paid are

Under US GAAP, dividends received are

Under US GAAP, interest paid or received is what type of cash flow?

In some cases, interest can be an investing or financing cash flow under US GAAP

Under US GAAP, dividends received can be considered financing cash flows.

Under US GAAP, dividends paid are operating cash flows

Under IFRS, dividends paid are reported as what type of cash flow?

Under IFRS, interest paid is reported as what type of cash flow?

Under IFRS, interest received is reported as what type of cash flow?

Under IFRS, dividends received are reported as what type of cash flow?

Under IFRS, taxes paid are always operating cash flows.

Under both IFRS and US GAAP, research costs are expensed as incurred. But under which body are the development costs capitalized?

Component depreciation, a method in which significant parts of an asset are identified and depreciated separately, is required under what body?

Which body gives firms the option to revalue assets based on fair value under the revaluation model?

Which body uses UNDISCOUNTED cash flows to determine whether or not an asset is impaired?

Under *******, an asset is impaired when its carrying value exceeds the recoverable amount. The recoverable amount is the greater of fair value less selling costs and the value in use (PV of expected cash flows).

Under *******, an asset is impaired if its carrying value is greater than the asset's undiscounted future cash flows.

Under IFRS, if an asset is impaired, it is written down to:

Under US GAAP, if an asset is impaired, it is written down to:

Under *******, loss recoveries are permitted as long as they aren't above historical cost. Under *******, loss recoveries are not allowed for assets held-for-use.

Impairments can affect cash flow.

Generally speaking, IFRS and US GAAP have similar accounting treatment of income taxes. However, while ******* prohibits upward revaluations, ******* allows upward revaluations and any resulting effects on deferred tax are recognized in equity.

***** is more rules-based. ***** is more principle-based.

The difference between the defined benefit obligation and the plan assets is referred to as the funded status of the plan. Under ******, the funded status is reported on the balance sheet. An overfunded amount is reported as an asset, while an underfunded amount is reported as a liability.

Under *****, firms remove the unrecognized actuarial gains and losses and unrecognized prior service cost from the funded status. The result is a balance sheet that doesn't represent economic reality.

Under *******, firms separately disclose the components of the benefit obligation, plan assets, and pension expense. In addition, firms disclose the assumptions used to calculate pension expense, such as discount rate, the compensation growth rate, and the expected rate of return on plan assets.

Which method is used when the investor can significantly influence the investee? (between 20%-50% ownership interest)

Which method is used when the investor can control the investee? (greater than 50% ownership interest)

In the case of business combinations with joint control, the proportionate consolidation method is preferred under ****** but the equity method is required under *******.

Held-for-trading securities are reported on the balance sheet at:

If the fair value of a held-to-maturity security increases substantially, the fair value is adjusted on the balance sheet.

Held-to-maturity securities are reported on the balance sheet at:

Available-for-sale securities are reported on the balance sheet at:

Under *******, inventory is reported on the balance sheet at the lower of cost or net realizable value. Under *******, inventory is reported on the balance sheet at the lower of cost or market value. Inventory can be recovered subsequent to a writedown under *******

Under ******, the value of property and equipment and identifiable intangible assets can be revalued upward, but under ******* they cannot.

IFRS does not allow extraordinary items but US GAAP does.

When a firm reporting under US GAAP cannot reliably estimate the outcome of a project, it must use the:

IFRS prohibits the use of the completed contract method and instead employs the cost recovery method.

Interest on a construction project must be capitalized under...

Discountinued operations are treated differently under IFRS and US GAAP

Under ******, impairment must be tested annually.

Under ******, an asset is tested for impairment only when events and circumstances indicate the firm may not be able to recover the carrying value through future use.

Under US GAAP, assets can never be valued upward.

Under , loss recoveries are permitted as long as they aren't above historical cost. Under , loss recoveries are not allowed for assets held-for-use.

Generally speaking, IFRS and US GAAP have similar accounting treatment of income taxes. However, while * prohibits upward revaluations, * allows upward revaluations and any resulting effects on deferred tax are recognized in equity.

* is more rules-based. * is more principle-based.

In the case of business combinations with joint control, the proportionate consolidation method is preferred under but the equity method is required under *.

Under ***, inventory is reported on the balance sheet at the lower of cost or net realizable value. Under *, inventory is reported on the balance sheet at the lower of cost or market value. Inventory can be recovered subsequent to a writedown under *****

Under , the value of property and equipment and identifiable intangible assets can be revalued upward, but under * they cannot.